Meet the Business Thinking finalists: London

Some of the UK’s brightest private companies – set to battle it out for a
share of £108m in finance – are embarking on ‘thought exchanges’ to Asia, Americas,
the Middle East and Europe to find new markets, partners and ideas. Meet the
London finalists in the HSBC Business Thinking initiative.

Philip Smith

10:56AM BST 07 Oct 2011

Lulu Guinness

Mention Lulu Guinness in the top fashion centres of the world and they will instantly know about the iconic designs and chic styles that epitomise its range of handbags and accessories.

“It’s a must-have fashion brand,” said Martin Mason (left), chief executive of the London-based company, which was created in 1989 by Lulu Guinness, the designer daughter of Sir Miles Rivett-Carnac, former chairman of Baring Asset Management and which now has revenues of £5.5m. With a staff of 27, Ms Guinness still keeps a hands-on approach as creative director.

So far the company has managed its brand and international expansion directly. It operates its own shops in London – a third is due to open in September – one in New York and via outlets across Europe.

It runs a wholesale business – selling to department stores such as Harrods and Selfridges, and sells via the web.

Lulu Guinness Ltd is soon to launch on the Home Shopping Network in the United States with Ms Guinness, who began her career in video production in the late 1980s, fronting the shows.

Now, two years into a ﬁve-year plan to roll out the brand further aﬁeld, Mr Mason is looking to adopt a business model based on joint venture partnerships and shop franchises. It already has two franchise stores in Tokyo and revenues from that country are generated via a licensing deal with the major trading house, Itochu.

Lulu Guinness Ltd also sells wholesale into Russia with a franchised store planned in Moscow by end of 2015.

For Mr Mason, it was the Far East that really needed cracking. “It was clear we needed to expand into other major regions and it was clear we needed a partner, particularly in China,” said Mr Mason. “China is the fastest-growing market for fashion brands in the world.”

Lulu Guinness Asia was established in Hong Kong as a 50-50 joint venture with Victor Chu, chairman of First Eastern corporation. That business works with local partners. “We have already done a deal with a company in Korea where will be opening two franchise stores later this year.”

Further franchise stores will follow in Kuala Lumpur later next year. Similar stores will follow soon in Hong Kong and other parts of China.

The company has already undertaken extensive research in second cities such as Shanghai. “Having a local partner with all that local knowledge is essential if we are to deliver growth in China,’’ said Mr Mason.

“We have just started research in India, looking to tie up a deal in 2015. All the predictions are that India has the potential to match China in terms of growth but it’s very difﬁcult to do business there unless you partner with an Indian company.”

South America is also on the radar as Mr Mason looks to turn Lulu Guinness into a truly global brand. “There also seem to be some good growth opportunities in Brazil. Along with Mexico it’s a market we are going to be looking at in the next year or so.”

So with such rapid growth – Lulu Guinness Ltd has seen 40pc growth in the past year and turnover is expected to double by 2015 – and with export operations already running in the US, Far East and Europe, what can Mr Mason expect to gain from his Thought Exchange trip to Dubai early next year? The company already sells wholesale into Dubai.

“It’s a huge region that is economically strong and a good place to do business. Apart from Dubai there is Abu Dhabi, Saudi Arabia, Kuwait – all strong retail areas with good shopping malls being built and a hunger for good Western products.”

Mr Mason aims to use the Business Thinking scheme to help grow the Lulu Guinness range in that cash-rich region.

“I’m looking forward to understanding more of the opportunities across the region. It’s getting the introductions to the local skill and knowledge. We’ll beneﬁt from being surrounded by people with that experience.”

Waterlogic International

Access to fresh, clean water is a major problem across much of the globe.

AIM-listed Waterlogic might not claim to have the answer, but its innovative — and soon to be patented — process for purifying mains-fed water for its water coolers could at least provide part of the solution.

That’s the driver behind the £41m turnover, 19-year-old export-focused business. So the chance to go to Dubai for the HSBC Thought Exchange trip, a place where water is a scarce commodity, is a real boon for the company.

“In the whole Middle East, water is already seen as a scarce resource.“I’m looking at wider uses for our UV technology either in terms of the portable offering or what we can do for institutions such as hospitals,” said group financial officer, Steve Harrison (above).

Reliance Fibres

Reliance, a paper merchant, buys old paper and cardboard from waste management firms and exports it to India for reprocessing, using the spare capacity on container ships. This simple model generates £12m a year income.

The company, which employs six people in London and three in India, now wants to open up new Asian markets.

Aspinal of London

What began as an online retailer of luxury leather goods in 2002 now has three dedicated shops and a host of concessions in London which, together with a US and euro website, generate sales of £10.8m. Franchised shops in the Middle East, Japan, China, Korea, Hong Kong, Malaysia and Singapore are planned next.

Spheric Trafalgar

Family-owned Spheric Trafalgar, based in West Sussex, sells £14m of ball bearings around the world; a key component for many growing sectors such as wind turbines, cosmetics and the automotive industry.

“The applications are vast and varied,” says the company secretary Mike Jennings, who sees considerable growth potential in China.

ES-KO

ES-KO provides logistical support in challenging locations worldwide. It works with Nato, the UN and private sector clients including oil and gas companies. Its range of services encompasses food – it provides more than 4.5m meals per month – laundry, construction and retail outlets such as bars and cafés.